Indonesia’s central bank cuts rates as inflation cools

Published 16/07/2025, 10:22
Indonesia’s central bank cuts rates as inflation cools

Investing.com -- Indonesia’s central bank cut its benchmark interest rate on Wednesday, resuming its monetary easing cycle as cooling inflation provided room to support economic growth.

Bank Indonesia lowered its seven-day reverse repo rate by 25 basis points to 5.25%, a move that was anticipated by most economists. Five out of eight economists polled by The Wall Street Journal had expected a cut, while three had forecast no change.

The central bank also reduced its overnight deposit facility rate to 4.50% and its lending facility rate to 6.00%.

The decision comes amid news of a trade deal with the United States that could potentially reduce tariff pressures on Indonesia’s economy.

Wednesday’s rate decision had been considered a close call, with domestic economic conditions and rupiah stability supporting the case for a cut, while external uncertainties suggested a more cautious approach might be warranted.

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